Launch of Reliance Jio to Boost the Sale of Smartphones

Brokerage company, Credit Lyonnais Securities Asia (CLSA) has predicted that the forthcoming launch of, Mukesh Ambaniled, Reliance Jio Infocomm will elevate the sales of smartphones in the country.

Statements of the Report

A report from the Mumbai-based company said that the share of smartphones in the entire mobile phone shipments will rise to 75% after the commercial launch of Reliance Jio. At present, it stands at 45%.In the April – June quarter of 2011, the share of smartphones was only 6%.

The report is prepared by telecom analysts, Deepti Chaturvedi and Akshat Agarwal. They mentioned that the sales of smartphones have increased as users replaced their feature phones. With the growth in smartphones, shipments of feature phones have reduced.

In the Financial Year (FY) 2014 – 2015, total mobile shipments decreased by 2% year-on-year, falling to 252 million. On the other hand, smartphone shipments increased by 58% year-on-year to reach 86 million. Currently, smartphone penetration is around 20%, while 3G penetration is just 12%.

Plans of Reliance Jio

Reliance Jio will present a fresh launch, with its services based on 4G technology. Other telecom companies in the country will overlay 4G services on existing 2G and 3G services.

The main deal of Reliance Jio is the spectrum trading agreement with Reliance Communications for 800MHz, in 12 telecom regions. This will let the company offer Voice over Long-Term Evolution (VoLTE) based services.

VoLTE is not yet introduced in China. After Reliance Jio rolls out the services in India, customers will require phones that support 4G VoLTE technology. Connectivity with the present voice networks will also be required.

At present, there are no VoLTE phones available in the Indian market. Reliance Jio is therefore planning to launch its own LYF branded smartphones, which will support its technology. The company has also inked pacts with a number of mobile phone makers to sell their smartphones.

CLSA Predictions

CLSA said it is expected that the top three telecom operators of the country will gain the maximum share.They may earn 73% of the sector’s revenue, and thrice the data revenues to reach USD 14 billion in the next three years.

The company said that revenue growth for the industry will be boosted due to data and internet services. This has been seen since the past two years and the trend will continue in the future as well. The report stated, “Over FY 2015- 2018, we expect industry revenues to grow at 10% Compounded Annual Growth Rate (CAGR) to USD 37 billion, driven by a sharp 40% CAGR in data revenues to USD 14 billion”.

It predicted that the data subscriber base will grow at 27% CAGR to 519 million subscribers by 2018. In the previous FY, the number was 198 million.

Reliance Jio’s Content Strategy

Reliance Jio is planning to stand out as a digital content company to compete with others. The main element of its digital content strategy will be content-streaming packages.

Summary

Mumbai-based brokerage company, CLSA said that the launch of Reliance Jio Infocomm Limited will boost the sales of smartphones in the country.

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